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US Slaps 25% more Tariff on India; Exports to bear the brunt of 50% duties
Industry News- Aug 07,25
The US has imposed a 50% tariff on Indian imports as a penalty for buying Russian oil, hitting key sectors like textiles, gems, and leather. China and others are not affected.
New Delhi
On Wednesday, US President Donald Trump announced an additional 25 per cent tariff on Indian goods, raising the total import duty to 50 per cent. The measure is being described as a penalty for India’s continued purchase of oil from Russia.
Several Indian export sectors—including leather, chemicals, footwear, gems and jewellery, textiles, and shrimp—are expected to face significant setbacks following the United States’ decision to impose a steep 50 per cent tariff on imports from India. Industry experts warn that the move could sharply reduce the competitiveness of Indian goods in the US market.
What has drawn particular concern is that India appears to be the only country targeted by this tariff action, with other major buyers of Russian oil—such as China and Turkey—so far avoiding similar punitive measures.
According to the Global Trade Research Initiative (GTRI), the increased tariffs could reduce Indian exports to the US by as much as 40–50 per cent. The hardest-hit sectors will include:
- Organic chemicals (effective duty: 54 per cent)
- Carpets (52.9 per cent)
- Knitted apparel (63.9 per cent)
- Woven apparel (60.3 per cent)
- Textiles and made-ups (59 per cent)
- Diamonds, gold, and related products (52.1 per cent)
- Machinery and mechanical appliances (51.3 per cent)
- Furniture and mattresses (52.3 per cent)
The initial 25 per cent tariff came into effect on August 7, with the additional 25 per cent set to be implemented on August 27. These duties are over and above existing standard US import tariffs.
During 2024-25, India-US bilateral trade reached $ 131.8 billion, with India exporting $ 86.5 billion worth of goods and importing $ 45.3 billion. The sectors most affected by the new tariffs include:
- Textiles/clothing: $ 10.3 billion
- Gems and jewellery: $ 12 billion
- Shrimp: $ 2.24 billion
- Leather and footwear: $ 1.18 billion
- Chemicals: $ 2.34 billion
- Electrical and mechanical machinery: $ 9 billion
The Confederation of Indian Textile Industry (CITI) has expressed deep concern, noting that the US is India’s largest market for textiles and apparel. It warned that the hike in duties would significantly erode India’s competitiveness, especially against countries not facing similar barriers. CITI has urged the government to take immediate support measures.
Experts also suggest that Indian exporters start diversifying to other international markets to sustain export growth. Many are hopeful that the ongoing negotiations for an India-US bilateral trade agreement (BTA) could help ease tariff pressures. The first phase of this deal is expected to be concluded by fall (October–November) this year.
However, officials maintain that India will not compromise on key red lines, especially regarding tariff concessions on sensitive items like agriculture, dairy, and genetically modified products.
News Source: NDTV.com
US-India trade
50% tariff
Indian exports
Gems and jewellery
Textile industry
Russian oil sanctions
Trade war
Bilateral trade deal
US President
Donald Trump
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